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On the Rise of NeoLiberalism in West During the 1968-2008 Era: Part 1

August 31, 2017 10 comments

One of the more interesting questions about neoliberalism concerns its apparent popularity among the general population in western countries during the 1968-2008 era. I mean.. why did so many average people in western countries willingly support neoliberal ideas and policies during that era? Some of might say that a similar percentage of the population in 1930-era Germany also supported Nazism- and therefore most people are easily misled idiots. Except that is not really true..

The rise of public support for Nazism in 1930-era Germany was the culmination of widespread disgust with repeated catastrophic failures of mainstream political parties in governing the country. To put it another way, the supposedly “normal” political parties of that era had shown themselves to be incapable of maintaining a general acceptable level of governance- on more than one occasion. Things reached a climax in the early 1930s when global economic depression and ‘austerity’ driven economic policies cause mass unemployment and misery among the general population.

At that stage, the only two remaining alternatives were the Nazis or some coalition of communist parties. After the 1932 elections, the rich and petite bourgeoisie in Germany supported the “business friendly” Nazis over the communist parties. Hitler took full advantage of the situation and the rest, as they say, is history. In other words, the rise of popular support for the Nazi party in 1930-era era Germany looks far more rational once you consider the environment in which it occurred. They did also implement some fairly populist polices (at least for the majority) in the first few years of their rule.

The point I am trying to make is that public popularity of repugnant ideologies in certain historical eras should not be seen as evidence that people are stupid or easily misled. Instead, such popularity should be understood, if not celebrated, through the lens of prevailing socio-economic conditions and cultural mores. That is also why people like Mussolini, Stalin, Franco came into power and were able to hold onto it for so long. That is also how so many ‘muricans still see their country as one of good law and order when it was always about enslaving, exploiting and murdering black and other non-white people.

And this brings me to the main questions posed in the current post, which are as follows: Why did so many average people in western countries support neoliberal ideas and policies during the 1968-2008 era? Why did so many non-rich people cheer on an ideology which made their lives poorer, more precarious and generally more shittier than before? Was it just good propaganda or were the reasons for the public support for neoliberalism during that era more systemic than most critics are willing to admit? And why might the critics of neoliberalism not want to consider systemic factors behind its rise during that era?

One of the biggest contemporary myth about the rise of neoliberalism is that it was centrally planned by cabals of rich businessmen behind closed doors in smoke-filled rooms. While I do not doubt that many such meetings occurred, it can (at best) explain changes in some government policy changes in a few countries such as USA and UK. However as anybody who has lived during that era will remember, the public was also very enthusiastic about a number of neoliberal policies from cutting the social welfare net, privatization of public goods and services, financialization of the economy, increasing corporate profits and many other ridiculous ideas.

So how do you explain public enthusiasm during that era for so many neoliberal policies? What were they thinking, or not thinking, when supporting those ideas and policies? What drove them to support policies that were against their best long-term self interests?

Here is my theory..

1] General prosperity and economic growth in the west after WW2, coupled with the residual effects of pre-WW2 colonialism resulted in what is probably the largest gap in living standards between the west and the rest of the world during the 1950s-1980s. Of course, that gap in living standards has decreased ever since those years and could likely go in the other direction in the future. Nevertheless, your average white person who grew up in that era almost certainly saw this as “proof” of their inherent racial superiority. They interpreted something which occurred through a combination of circumstances and luck as the natural order of things.

It is therefore not surprising that con-artists such as Ayn Rand, Friedrich Hayek, Milton Friedman etc started gaining an ever larger popular audience. While support by the scheming rich certainly helped these con-artists attain social respectability, it was the general environment of western society during those three decades which made neoliberalism seem ‘right’ in the first place. Most contemporary critics of neoliberalism would prefer to believe it was clever propaganda and sinister brain-washing, rather than inherent racism and other popular delusions of white people in western countries, which made neoliberalism the default ideology of the 1968-2008 era.

2] Some of you might have noticed that I consider 1968, and not the early 1980s, to be the beginning of neoliberal era. But why 1968? Didn’t neoliberalism start in the early 1980s under Reagan and Thatcher? While it is true that overt policy implementation of neoliberalism started in the early 1980s, the ideology itself had been fashionable for over a decade before 1980. While the precise triggering event or events which made neoliberalism fashionable was different in each western country, in the case of USA it came down to passage of civil rights related legislation in the mid-to-late 1960s.

Yes, you heard that right. Neoliberalism, as an ideology, became mainstream in the USA only after it became obvious to the average white person that maintaining their relative superiority over non-whites through overt “legal” racism was no longer possible. It is also therefore not surprising the strongest popular support of neoliberal policies such as shredding the social safety net, job precarization, union busting etc have always been stronger in ex-slave owning southern states and those adjacent to them (Texas, Kansas, Oklahoma, Indiana) rather than those in the North East or the West Coast.

3] But why would a combination of racism and delusions of inherent superiority specifically enable the dominance of neoliberalism in the west? Why not fascism or some other form of majority totalitarianism? Well.. it comes down to the delusion of inherent racial superiority. In the post-WW2 era, almost nobody wanted to be seen as a fascist, nazi or overt racist. Those were crude and failed ideologies. Neoliberalism, on the other hand, appeared to offer average white people most of the benefits of racism and discrimination while appearing to be liberal and hip. Since even the most average and mediocre white person now saw himself or herself as insurmountably superior to non-whites, they deluded themselves into believing that neoliberalism would only further their dominance.

Of course, it is now obvious that things did not work that way. However, in the late 1980s to mid 1990s, it was very easy for the average white person in USA to believe that the rest of world would never catch up with them. Remember, the USSR had just collapsed and everyone and their dog was proclaiming the end of history. China and other Asian countries had not reached the level of industrialization we see today. It appeared the white americans supporting neoliberalism were set for their own 1000-year Reich. I should also mention that some of the most damaging neoliberal trends like job precarization and high stealth inflation (housing, medical, education) had still not hit white-collar workers.

It is therefore not surprising that many average white americans, blue and white-collar, thought that they would be the winners of a neoliberal order. I mean.. it appeared to work for them for the first 10-15 years. Also, it was far easier to explain away problems caused by neoliberalism when they affected non-whites and poorer white people. Furthermore, the initial large wave of indiscriminate financialization specifically the housing price bubble and easy access to credit allowed the majority to look past ugly emerging problems. All of this meant that average white americans were cheering on neoliberalism until the financial crisis of 2008. Of course, by then it was too late..

In a future post of this series, I will try to explore why neoliberalism became popular in other western countries- specifically those in western Europe. As you will see, american influence was only one of the factors that drove the rise of that ideology in those countries.

What do you think? Comments?